Market evolution: Cotton yarn 85 percent (CN 5205) — 2015–2025

Introduction

This report examines the evolution of EU external trade in Cotton yarn other than sewing thread, containing ≥ 85% cotton by weight (CN 5205) over the period 2015–2025. The EU maintains a substantial structural trade deficit in this commodity, importing roughly nine to ten times more in value than it exports. Over the decade, both imports and exports contracted in volume, but the composition of suppliers, pricing dynamics, and production base underwent significant shifts. Three main findings structure this report: the steep decline in EU domestic production, the concentration and geographic realignment of the import supply base, and the pronounced price volatility that reshaped the market from 2021 onwards.

1. A shrinking domestic production base driving persistent import reliance

EU cotton yarn production collapsed over the decade

The most dramatic structural change in the EU market for CN 5205 is the near-disappearance of domestic production volumes. EU production fell from 774,575 tonnes in 2015 to just 81,006 tonnes in 2025, a decline of 89.5%. In value terms, production dropped from €1.95 billion to €393 million (−79.9%). This signals a fundamental structural retreat: EU mills have progressively exited cotton yarn spinning, relocating capacity to lower-cost regions or shifting to other fibre types.

Imports remained the dominant supply channel despite volume declines

Against this backdrop of domestic contraction, EU imports remained far larger in scale than domestic output. Import volumes fell from 274,655 tonnes (2015) to 203,142 tonnes (2025), a decline of 26.0%, while import values declined from €911.5 million to €714.3 million (−21.6%). The contraction in imports was thus far less severe than the production collapse, underscoring the EU's deepening reliance on external suppliers for its textile supply chain.

EU export volumes fell even faster than imports

EU exports of CN 5205 also contracted, from 13,842 tonnes to 8,871 tonnes (−35.9%), and from €95.3 million to €75.3 million (−21.0%). The trade deficit therefore narrowed somewhat in absolute terms — from −€816 million to −€639 million — largely because imports fell faster than exports in value. However, this improvement is misleading: it reflects lower import volumes rather than any strengthening of EU competitive capacity. The trade deficit remains structurally entrenched.

Rising export unit values reflect a move upmarket or niche positioning

Export unit values rose from €6,886/t in 2015 to €8,490/t in 2025 (+23.3%), while import prices increased only modestly from €3,319/t to €3,516/t (+6.0%). The persistent price premium on EU exports — roughly 2.4× import prices — suggests that remaining EU producers concentrate on higher-value, specialised yarns (e.g. combed, fine-count yarns) rather than commodity-grade products. This is consistent with the specialisation data, which shows Portugal and Italy as the most specialised EU producers with strongly positive RSCA scores (0.85 and 0.67 respectively).

2. Geographic realignment of EU imports: consolidation around Türkiye and emergence of new suppliers

Türkiye consolidated its position as the EU's dominant cotton yarn supplier

Among EU import partners, Türkiye was the largest supplier throughout the period, growing from €294 million in 2015 to €310 million in 2025 (+5.4%). Crucially, while most other major suppliers saw steep declines, Türkiye maintained its volumes and even expanded its share. In 2015, Türkiye accounted for roughly 32% of EU import value; by 2025, its share had risen to approximately 43%, reflecting growing concentration of the supply base.

India and Pakistan lost ground significantly

India, the second-largest supplier, saw its EU shipments decline from €264.7 million to €206.5 million (−22.0%), and Pakistan's fell from €68.7 million to €49.3 million (−28.2%). Both countries also exhibited elevated volatility: Pakistan's coefficient of variation (CV) stood at 0.21 and India's at 0.17, reflecting mid-period swings linked to domestic cotton availability, energy costs, and logistics disruptions.

Egypt's decline was the steepest among established suppliers

Egypt experienced the most dramatic contraction among the top seven suppliers, falling from €104.2 million in 2015 to just €58.2 million in 2025 (−44.1%). This represents a near-halving of the EU's Egyptian cotton yarn intake and may reflect competition from Türkiye, production constraints in Egypt, or shifts in downstream textile manufacturing.

Uzbekistan emerged as a fast-growing niche supplier

The standout growth story is Uzbekistan, whose EU shipments rose from €18.2 million to €40.2 million (+121.6%). Uzbekistan's emergence reflects the country's post-2017 cotton sector reforms, including the abolition of forced labour practices and liberalisation of cotton exports. However, its coefficient of variation (0.40) is among the highest of the major suppliers, indicating that its trade relationship with the EU remains relatively unstable year-on-year.

Import concentration increased markedly

The Herfindahl-Hirschman Index (HHI) for EU imports by value rose from 2,218 in 2015 to 2,886 in 2025 (+30.1%). An HHI above 2,500 indicates a highly concentrated market. This rising concentration means the EU has become more dependent on fewer supplier countries — principally Türkiye — which increases exposure to country-specific risks such as political instability, currency fluctuations, or trade policy changes.

EU Member States showed divergent import trajectories

Within the EU, importing Member States exhibited sharply different patterns. Portugal, the largest importer by 2025, increased its intake from €205 million to €262 million (+27.5%), reflecting the growth of its textile industry. Italy, formerly the largest importer, declined from €271 million to €201 million (−25.9%). Spain's imports collapsed by 64.1% (from €64.6 million to €23.2 million), and Belgium's fell by 83.6%. This redistribution suggests a geographic shift in downstream textile activity within the EU, with Portugal gaining prominence and several Western European economies retreating.

3. Extreme price shocks and rising volatility characterised the post-2020 period

Global commodity prices drove a sharp price spike in 2022

The most striking feature of the decade's price dynamics was a dramatic spike in import and export unit values around 2022. Import prices jumped from €3,011/t (the 2020 low) to a peak of €5,525/t in 2022, before falling back to €3,516/t by 2025. Export prices followed a similar trajectory, peaking at over €10,130/t in 2022. This spike was driven by a combination of surging global cotton prices (reflecting drought conditions in key growing regions and speculative activity), post-COVID supply chain disruptions, and the energy crisis triggered by the Russia-Ukraine conflict.

Specific partner-level price shocks highlight supply-side vulnerabilities

The shock detection analysis identifies several abnormal price events concentrated around 2019–2022:

The Swiss export shock (abnormality of 226.0, representing a 19.2% value share) is exceptionally unusual and likely reflects a combination of Switzerland's role as a re-export hub and the extreme tightness of fine-count cotton yarn supply during the 2022 global cotton price spike. Serbia's 56.3% price jump and Morocco's 52.3% increase similarly reflect the transmission of raw material cost inflation through the supply chain.

Smaller and emerging suppliers showed the highest trade volatility

The volatility analysis reveals that trade flows with smaller or newer partners were substantially more volatile than with established suppliers. On the import side, Viet Nam (CV 1.12), Bosnia and Herzegovina (CV 0.92), and Algeria (CV 0.92) exhibited extreme variability. On the export side, Pakistan (CV 0.89) and Algeria (CV 0.68) were the most volatile. By contrast, Türkiye (CV 0.16 for imports) and Tunisia (CV 0.18 for exports) showed relatively stable trade patterns, reinforcing their roles as reliable long-term partners.

Post-2022 normalisation left prices above pre-pandemic levels

While prices retreated from their 2022 peaks, the 2025 import price of €3,516/t remained above the 2015 level of €3,319/t (+6.0%). Similarly, the 2025 export price of €8,490/t was 23.3% above 2015 levels. This suggests that the structural cost base has shifted upward, likely reflecting higher raw cotton costs, increased energy and logistics expenses, and the pricing power of a more concentrated supplier base.

Conclusion

The EU market for cotton yarn (CN 5205) between 2015 and 2025 underwent a triple transformation: the near-collapse of domestic production, a geographic consolidation of imports around Türkiye, and a period of extreme price volatility that reset the market's cost structure. EU production fell by nearly 90% in volume, leaving the bloc ever more dependent on external suppliers. Import sourcing concentrated further, with the HHI rising 30% to 2,886, and Türkiye's share climbing above 40%. Meanwhile, the 2021–2022 commodity price shock — peaking at nearly double pre-pandemic import prices — exposed the vulnerability of this import-dependent model. While prices have since normalised partially, they remain elevated relative to 2015, and the market's structural dependence on a small number of suppliers poses ongoing risks. The emergence of Uzbekistan as a growth supplier and the rise of Portugal as the EU's primary importing hub are notable realignments, but they do not fundamentally alter the picture of an EU cotton yarn market in structural decline on the production side and increasing exposure to external supply dynamics.